The new Prime Minister, Sir Keir Starmer, has appointed Liz Kendall as the new Work and Pensions Secretary. MP for Wycombe, Emma Reynolds, has been appointed as the new pensions minister. The pensions portfolio promises to be busy and we hope to see the following issues addressed as soon as possible:
- The DB scheme funding regulatory Code needs to be laid before Parliament. The new funding regime is due to come into force for valuations with effective dates from September 22, 2024, under legislation that has already been passed. The regulatory guidance is an essential part of the new process.
- The Court of Appeal heard the appeal from the High Court decision in the Virgin Media case on June 26 and 27 although judgment is not expected to be handed down until the Autumn. The High Court held that the actuarial confirmation which must be sought when scheme rules relating to certain contracted out rights are amended, should cover both past service and future service entitlements. The Court of Appeal will decide whether the High Court judgment was correct or that only past service rights should be covered by the actuarial confirmation. If the decision is not reversed on appeal, legislation includes a power for regulations to validate retrospectively rule amendments that would otherwise be void. It remains to be seen whether there will be any intervention from the DWP.
- The new Chancellor, Rachel Reeves, has indicated that the intention of the new government is to progress the various initiatives under the Mansion House reforms. These include the delivery of better value for pension savers and boosting the investment of pension funds in UK business. The King’s Speech and State Opening of Parliament are scheduled for July 17, 2024.
The new Government has committed itself to a review of the UK pension system, although it is currently unclear exactly what this review will address. Hopefully, stability in pensions policy and certainty of the tax rules that apply to savers will be two of the outcomes.
Although the new Government’s has confirmed it will not reintroduce the lifetime allowance or alter the state pension triple lock, it remains to be seen if pensions could be subject to other tax changes. These could potentially include including pension pots in individuals’ estates for IHT purposes, decreasing the annual allowance which is now £60,000 or reducing the 25 per cent tax-free cash which can currently be taken.
